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W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…

“Slavery – the one cause of the Civil War.” – John Stuart Mill, 1862

Could there be a doubtful thoughts about it? Certainly the American Civil War was about slavery… was it not? Well actually, one of the most hoaxes in our history is that the Civil War was started because of the slavery issue and that Lincoln, the Great Emancipator, started a terrible war to break the claims of bonding that enslaved over three million black Americans. Right before the war, the South had everything its way.

In 1860, Southerners held the Supreme Court and Lincoln and Congress were beginning the process of passing a constitutional amendment to protect slavery for all time! What happened?

Let's rewind the clock back to the year 1832. By that year the national debt from the War of 1812 had been extinguished and Southerners didn't see a need to keep up the exorbitant import taxes which appeared to only jack up price tags for Southern consumers. Either the South paid high import taxes on foreign goods or it bought Northern manufactured goods at excessive prices. In either case, Southern funds ended up in the North. To say the South was not happy with this arrangement would be an understatement. If you're feeling the pressure with today's taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!

So, in 1832 a convention was hosted in South Carolina to get rid of these federal import taxes. The convention declared the tax was unconstitutional and gave the governor the power to to defy the enforcement of the import taxes instituted by the national government. It seemed like a civil war was in the making. Mild tempers prevailed, however, and the Great Compromise of 1833 lowered import taxes over the subsequent few years to an area the South would tolerate. Go here if you want help with a modern-day Tax Return in Raleigh, NC.

Over the next few years, however, Northern commercial and manufacturer companies forced into Congress new taxes that again stressed Southern planters and made Northern manufacturers become rich. In 1850, John C. Calhoun, the South’s most exceptional spokesperson, delivered a speech to Congress. His speech listed 3 grievances of the South that may cause secession from the Union and war. The first two had to do with fears concerning the gradual decline of power of the South in general and the the power of state government as well.

The third, and really the only solid complaint, was about taxation. In Calhoun’s eyes, national import taxes was a targeted legislation against the South. Heavy taxation on the South created money that was used in the North. The center of economic strength in the country was steadily changing strongly to the North. Calhoun spoke of secession if the taxes were not reduced. But what about the slaves? Well, in his run for the presidency in 1860, Lincoln steadily repeated he wouldn't do anything about slavery in the South. Truly, the vast majority of Northerners did not care much about black men in bondage, any more than they worried about the Indian in the West or poor uneducated workers in factories. The majority of black slaves got substantially better quality treatment and better compassion than their working-class counterparts in the North. Lincoln, actually, promised Southern plantation-owners that run-away slaves would be caught. The Congress and subsequently the Supreme Court (Dred Scott decision) continually affirmed that slavery wasn't going anywhere.

However, right as Lincoln was placed in office and Congress assembled in 1861, they created more high import tariffs. Slavery was not an problem – higher import taxes were. In his inaugural address Lincoln stated he would collect the customs in the South even if there was a secession!

Fort Sumter, at the beginning of the Charleston Harbor, started to fill with Union soldiers to enforce the collection of the new taxes. The Civil War began in 1861 when South Carolinians shot at the federal garrison at Fort Sumter. The inevitable had been brewing for years – but it wasn't about the slaves. It was over tax policy.

Two years after that, Lincoln issued the Emancipation Proclamation, and then only after repeated military battles, as a last resort to rally the North to a noble cause. To address the slave issue – the majority of Northerners didn't care much about black people in bondage, any more than they cared of Native-Americans to the west or poor uneducated peasants in the factories. Ironically, many black slaves received better treatment and greater compassion than their impoverished counterparts in the North.

That's it for the History of Taxes Series!

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